Pakistani official was paid $12m for Australian wheat

Daily Times, January 31, 2006
Pakistani official was paid $12m for Australian wheat

SYDNEY: Australia’s monopoly wheat exporter paid a Pakistani government official 12 million US dollars to ensure sales within the country, a Sydney inquiry into Iraq’s UN oil-for-food scandal heard Monday.

The commission of inquiry into the AWB’s (formerly the Australian Wheat Board) business in Iraq is investigating the company’s practices in Pakistan as part of its probe into whether there was a culture of kickbacks in its foreign dealings.

The inquiry has already unearthed allegations of corrupt practices in Pakistan.

Earlier this month it heard that two former AWB employees dealing with the country had demanded legal indemnity in case some payments amounted to bribes and that an Islamabad-based Pakistani agent was paid four million US dollars for securing a one million tonne wheat shipment.

The commission’s senior counsel, John Agius, Monday revealed that AWB agreed to pay the same Islamabad agent, who was a Pakistan government official, a total of 12 million US dollars over three years until 2000. AWB trade and commodities chief Peter Geary said he was aware of some details about an Islamabad agent. But asked whether he knew the agent was a Pakistani government official, Geary replied: “I’m not aware of that, sir.”

Geary said he knew there was an arrangement with an agent in Karachi, who AWB shared with US wheat export company Cargill, but was “aware there was another agent and that the commission was much higher.”

The Australian government called the commission of inquiry into AWB’s dealings with Iraq after a United Nations report into corruption in the oil-for-food programme named AWB as paying 220 million US dollars in kickbacks to the Iraqi government. AWB has said it was unaware that the Iraq payments, which were paid to a Jordanian trucking company, were being funnelled to Saddam Hussein’s regime.

Meanwhile Australian Prime Minister John Howard denied knowledge of the bribes paid by the country’s wheat exporter AWB to Saddam Hussein’s Iraq under the UN’s corruption-tainted oil-for-food programme.

“We were in no way involved with the payment of bribes,” Howard told national radio Monday. “We didn’t condone them, we didn’t have knowledge of them, but we did work closely with AWB.

“I make no bones about that. I had no reason to believe that AWB Ltd wasn’t just going all out to preserve Australia’s wheat sales to Iraq,” he said. An official inquiry Monday heard that Howard wrote to AWB’s chief executive in July 2002 after Baghdad threatened to cut wheat imports because of Australia’s support for the United States ahead of the war on Iraq.

“In view of the importance of the matter, I suggest the government and AWB Ltd remain in close contact in order that we can jointly attempt to achieve a satisfactory outcome in the longer term,” Howard wrote to CEO Andrew Lindberg.

A United Nations report last year charged that AWB had paid some 220 million dollars in kickbacks to secure 2.3 billion dollars in wheat contracts with Iraq under the 1996-2003 oil-for-food programme.

The programme allowed Iraq to export oil to buy food, medicine and other humanitarian supplies under UN supervision to lessen the impact of international sanctions on the Iraqi people.

Howard said he had met with the AWB after Lindberg’s return from Baghdad and was “pleased” that the problem had been resolved.

Asked whether he knew how the AWB achieved the favourable outcome, Howard said: “No, they didn’t go into any detail. We had no suspicion, no suggestion there had been any bribes paid.”

Howard established the commission of inquiry into the formerly government-run Australian Wheat Board in November, but restricted it to examining allegations of wrongdoing by private companies.

The opposition Labour Party is pressing for the terms of reference to be widened to allow the commission to investigate the government’s role in the scandal.

“Anything less is a cover-up of what has been, to my mind, the worst piece of corruption I have seen in my 25 years as a federal politician,” said Labour leader Kim Beazley.

He took aim at Howard as well as Deputy Prime Minister Mark Vaile and Foreign Minister Alexander Downer.

“They’re like the three wise monkeys. They see no evil, they speak no evil, they hear no evil,” he told reporters. afp